European Central Bank official cites guidelines set last fall, recent progress in meeting promises to lenders

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A pawn shop’s advertising display in central Athens provided a reminder of the country’s ongoing financial difficulties, even with recent signs of stabilization.

By Jack EwingNew York Times
August 27, 2013

BERLIN — The highest-ranking German in the European Central Bank said Monday that Greece could be eligible for additional aid and debt relief next year if it continues to fulfill promises made for the assistance it has been receiving.

The German, Jörg Asmussen, a member of the central bank’s policy-making executive board, said in an interview that he was not signaling a new attitude toward Greece, but was simply reiterating decisions made last year.

“There is no change of policy,” Asmussen said, noting that eurozone leaders decided in November they would reexamine Greece’s needs early in 2014.

Still, his comments came as Greece became an issue ahead of Germany’s national elections Sept. 22. Asmussen’s former boss, Wolfgang Schäuble, the German finance minister, put Greece back on the public agenda last week when he said
more aid was certain, rather than merely very likely. Asmussen was a top aide to Schäuble before joining the European Central Bank in 2011.

Asmussen’s comments Monday referred to a decision in November by the eurozone finance ministers, or the Eurogroup. They agreed that Greece would be eligible for a fresh look at its needs as soon as it was able to finance current government spending on its own, not counting interest payments, had taken steps to improve its economic performance, and fulfilled other promises to its international lenders: the ECB, the International Monetary Fund, and the European Commission.

If “the debt is still considered to be too high, the Eurogroup will consider to take additional measures,” Asmussen said. “That is the point of time when we will look at the debt question again. This is already decided and made public in November last year.”

The IMF has estimated that Greece will have a financing shortage of around $14.6 billion for next year and 2015. Greek Finance Ministry officials have suggested that the shortage will be smaller than the IMF estimate, which is subject to revision, but they have been exploring ways to plug the gap. In an interview over the weekend with the Greek newspaper Proto Thema, Greece’s finance minister, Yannis Stournaras, cited a figure of $13.4 billion as the likely shortage.

Asmussen, who met in Athens last week with Prime Minister Antonis Samaras, said there were signs of stabilization in the country, which has suffered soaring unemployment and plummeting economic output.

Referring to recent economic data, Asmussen said, “For the first time in years there were no negative surprises.”